North America: Electric vehicles (EVs) are no longer a niche tech fad – they’re the centrepiece of an industrial shift that could remake energy, mining, manufacturing and geopolitics. At the heart of this shift: the battery. Analysts now talk about a $1 trillion market opportunity spanning battery cells, materials, gigafactories and recycling. But one country dominates almost every rung of the battery ladder: China. The big question for policymakers and industry in the United States, Canada and Mexico is simple but painful: can North America close the gap fast enough?
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North America: Batteries are the $1 trillion prize?
Batteries are the economic and strategic core of electrification. They’re not just a component — they’re the single biggest cost and supply constraint in EVs, grid storage, and many portable technologies. Estimates vary, but the broader lithium-ion battery ecosystem — cells, gigafactories, materials processing, recycling and supporting industries — is large enough that trillions of dollars of capital and revenue will flow through it during this decade. The global battery manufacturing base has expanded fast: manufacturing capacity doubled since 2022, topping ~200 GWh in 2024, with roughly 700 GWh more under construction — a huge industrial build-out.
How far behind is North America?
North America has responded with big policy moves and factory announcements, but the gap remains large in several areas.
Policy actions: The United States’ Inflation Reduction Act (IRA) introduced powerful tax credits and incentives targeted at onshore battery manufacturing, critical minerals processing, and EVs assembled with North American content. Those incentives have catalysed investment: battery plants, cathode and anode fabs, and component factories have been announced across the U.S. and Canada. The IEA notes U.S. battery capacity has expanded rapidly since 2022 — but the global capacity build-out is still heavily weighted toward Asia.
Industrial reality: As of 2024–2025, the U.S. and Canada are building dozens of gigafactories, but combined capacity remains far smaller than China’s installed base and pipeline. In plain terms, investment is rising, but China’s years-ahead lead in scale and processing sophistication is not trivial to erase quickly.
North America Vs China’s
| Dimension | China (today) | North America (today) |
|---|---|---|
| Cell manufacturing scale | Majority of global capacity; many giant players. | Rapidly growing but smaller installed base; many announced gigafactories. |
| Refining & processing | Dominant in many key steps (refining, magnets, precursor chemicals). | Limited; building capacity but still dependent on imports for many refined materials. |
| Policy support | Long-term industrial strategy + state-backed finance. | IRA and other incentives are strong but require sustained political support. |
| Recycling & circularity | Growing investments in recycling and reuse. | Growing focus, but needs scale and standardized collection. |
Conclusion
North America can narrow the gap — and in specific niches (advanced cells, defence-grade magnets, resilient regional supply chains) it may even achieve leadership. But fully “catching” China across the whole value chain is a multi-year, capital-intensive project that requires more than factory ribbon-cuttings. It requires deep investment in refining, predictable long-term policy, quick but responsible permitting, workforce training, and a focus on recycling and innovation.
China’s current edge — scale, vertical integration, and control of refining/processing — is a structural advantage. That said, geopolitical incentives, the IRA’s incentives, growing private capital, and strategic alliances give North America a plausible path to greater autonomy and competitiveness, especially if policy and industry remain aligned. In short: possible, but not inevitable.
Bhakti Rawat is a Founder & Writer of InsureMyCar360.com. This site Provides You with Information Related To the Best Auto Insurance Updates & comparisons. 🔗